What is the difference between a credit assessment and a financial assessment?

What is the difference between a credit assessment and a financial assessment Introduction: Assessments in the Financial Landscape Hello, and welcome to our video on credit and financial assessments. In the world of finance, these evaluations serve as fundamental tools for decision-making. While they might seem similar, credit and financial assessments have distinct objectives and methodologies. Let's dive deeper into their dissimilarities and understand their individual significance. Credit Assessment: Evaluating Creditworthiness A credit assessment primarily revolves around determining an individual or entity's creditworthiness. It is a process that lenders, such as banks or financial institutions, undertake before extending credit. The goal is to gauge the likelihood of the borrower repaying the borrowed amount. Credit assessments involve examining various factors, including the borrower's credit history, outstanding debts, and payment patterns. These evaluations result in a credit score, a numerical representation of the borrower's creditworthiness. Financial Assessment: A Holistic Financial Health Check In contrast, a financial assessment provides a comprehensive overview of an individual or entity's financial health. It encompasses a broader range of aspects beyond creditworthiness.